Poverty, Income Dynamics, and Returns to Capitals in Agricutlural Frontiers: A Case Study for the Brazilian Amazon

While there is a consistent body of literature on household demography, land use, and migration in agricultural frontiers, especially in the Amazon, few studies address changes in households’ poverty due to change in their portfolio of capitals. This paper provides insights on poverty experience among rural households as frontier evolves from settlement to expansion and market integration. Building on the livelihoods approach, we focus on the estimation of time spent in poverty according to key household capitals, which have been shown to affect household well-being. Empirical evidence on how these capitals affect rural household income and poverty experience are provided by novel longitudinal data for Machadinho d’Oeste, Rondônia, in the Brazilian Amazon. Different from other household level data in the Amazon, ours include interviews applied to settlers at the onset of the settlement project, back to 1985, with follow-ups up to 2010, covering a 25 years period. We concentrate in the panel 1987-1995 to simulate how improvement in key capitals would impact the average time each household spent as poor and non-poor. This evidence will contribute to similar simulations based upon other study areas in the Amazon and in Thailand, providing material for meta-analysis of poverty and capitals in agricultural frontiers worldwide.